Batch experiments were conducted to determine the effect of oxidation reduction potential (ORP) on sludge reduction in a bypass micro-aerobic sludge reduction system. The system was composed of a modified oxic–settling–anaerobic process with a sludge holding tank in the sludge recycle loop. The ORPs in the micro-aerobic tanks were set at approximately +350, −90, −150, −200 and −250 mV, by varying the length of aeration time for the tanks. The results show that lower ORP result in greater sludge volume reduction, and the sludge production was reduced by 60% at the lowest ORP. In addition, low ORP caused extracellular polymer substances dissociation and slightly reduced sludge activity. Comparing the sludge backflow characteristics of the micro-aerobic tank's ORP controlled at −250 mV with that of +350 mV, the average soluble chemical oxygen (SCOD), TN and TP increased by 7, 0.4 and 2 times, median particle diameter decreased by 8.5 μm and the specific oxygen uptake rate (SOUR) decreased by 0.0043 milligram O2 per gram suspended solids per minute. For the effluent, SCOD and TN and TP fluctuated around 30, 8.7 and 0.66 mg/L, respectively. Therefore, the effective assignment of ORP in the micro-aerobic tank can remarkably reduce sludge volume and does not affect final effluent quality.